On 7 May 2020, the Cabinet Office produced a note offering guidance to parties to a contract during the current pandemic.
It is non-statutory guidance but the Government strongly encourages parties to follow the guidance for their collective benefit and for the long-term benefit of the UK economy.
In the note, responsible and fair behaviour is strongly encouraged in performing and enforcing contracts where there has been a material impact from Covid-19.
This includes being reasonable and proportionate in responding to performance issues and enforcing contracts (including dealing with any disputes), acting in a spirit of cooperation and aiming to achieve practical, just and equitable contractual outcomes having regard to the impact on the other party (or parties), the availability of financial resources, the protection of public health and the national interest.
The guidance applies with immediate effect and will be reviewed on or before 30 June 2020.
It will be interesting to see, particularly in a landlord and tenant context, whether parties do adhere to the guidance and open (or continue) dialogue to find a mutually beneficial outcome for all involved.
The guidance in this note is that parties to contracts impacted by the COVID-19 emergency should act responsibly and fairly, support the response to COVID-19 and protect jobs and the economy.